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Dhaka Tribune

SME IPO subscription begins for Mamun Agro

The company will raise Tk10 crore by offloading 10 million shares to qualified investors

Update : 20 Feb 2022, 05:53 PM

Mamun Agro on Sunday became the sixth company to raise capital through an initial public offering (IPO) under the small and medium enterprise (SME) platform. 

The company will raise Tk10 crore by offloading 10 million shares to qualified investors (QIs) during the subscription period that is set to close on January 27. 

“As per the existing regulations, it is not possible for a company to come to the main board within two years of issuing placement shares,” said Md Abdur Rob, chief financial officer (CFO) of Mamun Agro.

But the business was growing, so it needed more investment, he added. 

“Many have already called us; some have come directly. They want to know about our business, our EPS. I hope they have all applied. However, now that the money is directly deposited in the bank account, it is not possible to say how many applications have been received before the subscription period closes on January 27,” Rob said.

An official of the Bangladesh Securities Exchange Commission (BSEC) told Dhaka Tribune that the issuing company will not be able to issue any bonus shares for the next three years from the date of transaction on the SME platform.

Mamun Agro currently has 40 million ordinary shares outstanding and a successful capital raising will result in a total of 50 million shares, according to the IPO prospectus.

The company is involved in the manufacturing, marketing and selling of agro products in the categories of insecticide, pesticide and certified seeds in the local market. 

Mamun Agro plans to invest Tk1.3 crore for construction of a 3-storied factory building while utilize the remaining IPO fund of Tk8.4 crore as working capital, showed the prospectus.

The company, during the July 2020 to March 2021 period, registered a revenue of Tk39.8 crore that resulted in net profit of Tk3.9 crore in the nine months.

According to the prospectus, revenue from the seeds segment amounted to Tk15.9 crore while the remaining Tk23.9 crore or 60% of the total was contributed by the pesticide segment. 

The company’s sales revenue is expected to grow at higher than 10% in a couple of years, as per the issue managers. 

BMSL Investment and Uttara Finance Capital Management are the issue managers of the company.

The company started its commercial operation back in the year 2003 and was later converted to a public limited company in 2019. 

Last year, the SME platform raised a total of Tk60.5 crore for five companies.

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